Has Uchumi CEO Jonathan Ciano lost his talisman at the chain store? Perhaps that is the question on every person’s mind, following the recently released results from the supermarket that saw its profits for the second half of 2014 plummet drastically.
The retail chain posted a half year loss of Ksh262.3 million compared to a net profit of Ksh106.9 million recorded during a similar period in 2013. According to Mr Ciano, the poor results can be attributed to a rising wage bill coupled with increased costs of rent as well as reduced customer spending as insecurity continues keeping customers off the shopping malls.
“Our rental expenses especially for the newly opened branches are quite high. Insecurity and salary expenses have also contributed adversely to the losses,” noted Mr Ciano.
With the supermarket sales dropping from Ksh7.2 billion in December 2013 to Kshs6.8 billion, the bulk now stops at Ciano’s desk to try and take the chain store back to the profit margin lest it goes back to receivership, something it underwent in June 2006. So far Mr Ciano has laid down recovery channels for the retailer.
“We have started plans to pay our suppliers in time and refurbish our existing outlets to raise our profits,” he noted adding that 10 more branches will be opened across the East African region to attract more customers and tap on the growing middle-class. The oldest supermarket in Kenya is ranked fourth after Nakumatt, Tuskys and Naivas.
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